Oil prices fell after rising sharply on Monday. Traders are worried about possible supply problems because of new tensions between the United States and Iran.
On Tuesday, Brent crude oil prices dropped by 1.26% to $113 per barrel, while U.S. West Texas Intermediate (WTI) futures decreased by 2.12% to $104.16 per barrel. On Monday, Brent and WTI had increased by 6% and 4%, respectively.
Tensions rose after the United Arab Emirates was attacked by Iranian drones and missiles, and the U.S. claimed it had sunk Iranian ships in the Strait of Hormuz. President Donald Trump warned that Iran would face serious consequences if it attacked U.S. ships in the strait.
Goldman Sachs noted that global oil inventories are not critically low, but some regions may face shortages soon. Refined products like jet fuel and naphtha are being used up quickly. Chevron’s CEO Mike Wirth said fuel shortages are becoming a bigger worry as access to the strait is limited.
Currently, global oil stocks should meet about 101 days of demand. However, this figure hides growing shortages in countries like South Africa, India, Thailand, and Taiwan.
